The Permian in western margin of Songliao Basin is a strategic potential field of oil and gas resources in northeastern China, but the systematic researches since few boreholes were drilled up to Permian strata, as well as there is a lack of seismic and well-logging data. This paper presents the lithological composition of the Permian Formations on the basis of regional geological survey in western margin of Songliao Basin. A total of 60 mudstones and shales were collected to evaluate the organic geochemical and petrophysical characteristics and gas prospectivity of Permian source rocks. The Permian is composed of Shoushangou, Dashizai, Zhesi and Linxi Formation, which represent large sets of mudstones and shales, which are mainly deposited in a weakly to strongly reducing marine environment. The primary organic matter precursors in Permian were lower aquatic organisms such as zooplankton and algae, while a few samples of Linxi Formation indicate mixed sources of lower aquatic organisms and terrigenous higher plants. The Permian gas–prone source rocks are at over–mature stage with vitrinite reflectance Ro% = 2.01%–3.14% and mainly classified as fair to good quality and type II–III kerogens, and generally have a tricyclic terpane distribution pattern of C₂₁>C₂₃>C₂₀, but Shoushangou Formation and Linxi Formation have subordinate patterns of C₂₁>C₂₀>C₂₃ and C₂₃>C₂₁>C₂₀, respectively. The residual organic matters in Permian source rocks have CH₄ yields up to 24.34 mg/g∙TOC at EASY%Ro = 4.45%, which indicate the possibility of secondary gas generation at Ro% = 2.0%–3.5%. The pores and fractures are developed in Permian source rocks with widths of 5.28–18.64 μm, and mean values of porosity and permeability are 2.17% and 0.0043 × 10⁻³ μm², respectively. The source–reservoir–cap rock assemblages in Carboniferous–Permian and Mesozoic sedimentary sequences are included in situ and near–source accumulation in Permian, and long–distance migration and accumulation in underlying Carboniferous and overlying Triassic, Jurassic and Cretaceous. The Permian system can be regarded as a potential gas exploration target in the western margin of Songliao Basin.